General Elections: What to Expect in the Future?
Here’s a clean, decision-oriented read on how the new congressional balance of power is likely to shape Bolivia’s economic policy over the next 12–24 months. I’m grounding this in the certified election outcome (runoff set for Oct 19 and MAS nearly wiped out in Congress), the parties’ stated platforms, and current macro/sector data (fuel subsidies, FX reserves, gas decline, lithium deals). (European External Action Service, AP News)
Big picture: a reform-minded Congress facing a crisis economy
With the Congressional reality pretty much set, in that PDC, LIBRE, and Unity are set to hold a commanding majority and, at the same time, MAS reduced to a minimal presence, the Bolivian legislature is structurally disposed toward market-leaning stabilization, tighter fiscal control, and a reset of extractives policy. Unity is poised to be a pivotal broker on contentious items (fuel subsidies, FX, and state-firm reforms). (AP News)At the macro level the economy is facing a number of acute constraints: low international reserves & FX shortages, high and rising inflation, fuel scarcity, and weak growth. Any president is most likely to face a de facto stabilization program; Congress has the votes to pass it—what’s in question is speed, sequencing, and the social cushions. (IMF, The Associated Press, AP News)
What the numbers and platforms imply
1) Fuel subsidies & prices (the fiscal pivot)
Bolivia has had the problem of subsidizing the price of fuel for a long time. It has been the source of many politically unstable and risky moments. This time around is no different. Fuel subsidies have swollen well beyond budgeted levels (estimates for 2024 in the $2.0–2.9 bn range). With FX scarce and smuggling rife, the current regime is fiscally and logistically unsustainable. (lostiempos.com, Visión 360, rtpbolivia.com.bo)the most likely congressional line on this issue is expected to be phased subsidy rationalization with compensatory measures (targeted cash transfers/transport vouchers), rather than a shock lift—Unity’s swing votes will push for gradualism to contain protest risk among transportistas (people who live from the transport business) and urban low-income households. PDC has campaigned on cutting subsidies; LIBRE is broadly aligned on consolidation. (Wikipedia)
Policy that could be implemented:
- Tiered pricing (commercial vs. household/transport)
- Anti-smuggling enforcement.
- Time-bound price bands and automatic indexation rules to depoliticize adjustments.
- Targeted transfers funded by savings (best practice per international evidence). (World Bank, UNDP)
Likelihood of passing will be due to non-MAS majority in congress and dire fiscal/FX arithmetic.
2) Exchange-rate & monetary policy (managing the peg stress)
Within the context of “critically low,” FX reserves, the parallel rate has gapped far from the official 6.96 Bs/USD. The prices for imports have acquired their own dynamics and lines for these products, expecially for fuel, have reached a concerning level. Many imported products are constrained. Added to the latter, the inflation level has surged in 2025 versus prior years. (IMF, Roger Mario López Justiniano, The Associated Press). The economy has been dealing with these problems for the last years already.In light of the changes due to the elections, it is likely that congress will pass legislation to reinforce BCB autonomy and transparency (Unity priority), alongside temporary FX measures (export surrender rules, priority allocations) while a broader FX regime adjustment is designed. Whether that becomes a crawling band or a one-off correction will hinge on the runoff winner and social risk calculus. (Reuters)
Another path being considered is that of building bridges to external finance. A center-right Congress is more open to multilateral financing (IDB/WB), and some blocs could even countenance an IMF precautionary program if conditions are framed around subsidy reform and social protection. (Markets were already pricing a policy turn ahead of the vote.) (Reuters)
3) Hydrocarbons (gas) policy reset
The era that fueled MAS' rise with high natural gas prices seems to be over. For more on that see previous posts in this blog, specially since 2006. The problem has been that not only the price of natural gas has been falling, but also gas output has been falling for a decade; e.g. exports to Brazil/Argentina have dwindled, with Argentina now sending gas into Brazil via Bolivia’s system—a striking reversal. Without upstream reinvestment, Bolivia risks net import status. (OilPrice.com, Reuters)Again, based on the election results, congress' line is expected to make use of legal and contractual tweaks to attract upstream CAPEX—faster permitting, clearer fiscal terms around YPFB, possibly service contracts with better price signals. LIBRE and PDC both favor jump-starting private investment; Unity seems likely to trade votes for transparency and local-content provisions. (OilPrice.com)
The problem is reality. Even with reform, volumes won’t rebound fast; policy seems likely to focus on reducing domestic bottlenecks and diversifying the energy mix, such as biofuels in the east, and power imports as backstop. (OilPrice.com)
4) Lithium & critical minerals (from gridlock to governance)
In the area of critical minerals, such as Lithium, the CBC/CATL direct-lithium-extraction deals and a Russian contract are stuck in courts and politics; legislative approval and governance safeguards are the chokepoints. (MINING.COM, S&P Global, Reuters)With the newly aligned congress, a non-MAS majority is likely to re-open, audit, and re-sequence the deals to:
lock in local revenue-sharing and environmental baselines, enforce transparency (contracts and offtake), and diversify partnerships beyond a single bloc (China/Russia) to crowd in Western/Japanese/Korean capital and tech.
What to watch: A new Lithium Governance Law (contract disclosure, water-use thresholds, royalty formula), plus a YLB board reform to de-politicize approvals.
5) Fiscal stance & public investment
In light of the economic troubles, i.e. growth slowed on hydrocarbons decline and FX constraints, the IMF has flagged the need for fiscal consolidation and a better public-investment mix. Experts expect the budget to front-load savings from subsidy reform and tilt CAPEX to logistics (eastern agribusiness corridors) and energy reliability. (IMF)With spreads high and ratings weak, Congress has incentives to signal discipline early to reopen market access and unlock multilateral financing. (Fitch Ratings)
6) Sectoral/regional bargaining you should anticipate
On a regional front, eastern lowlands (Santa Cruz, Beni, Pando) seem to have gained strength in leverage for agribusiness and biofuels, land-titling changes, and export facilitation. LIBRE, in particular, favors biofuel expansion and agricultural deregulation. Some experts argue that environmental safeguards will likely be a fault line with highland/urban blocs. (Wikipedia)On the highlands/urban centers (La Paz, Cochabamba, Oruro, PotosÃ), PDC’s base and urban middle classes seem likely to push anti-corruption, price stability, and targeted social cushions during adjustment.
On the issue of decentralization finance, Paz has floated a “50-50” split of public funds between national and regional levels. If he wins the presidency, Congress is likely to debate a revenue-sharing reform—politically attractive to governors/mayors but complicated by the near-term need to centralize cash for stabilization. Observers expect pilot transfers and performance conditions, not an overnight 50-50. (Wikipedia)
7) Social risk management (the gating factor)
Finally, even pro-reform majorities can be stalled by the street in Bolivia.
Here are the most sensitive dials:
- Fuel price path (pace of adjustments)
- Urban transport fares & food prices (bread, cooking oil)
- Employment in state firms (YPFB/ENDE/COMIBOL)
What can Congress do: pass a single “Stabilization & Protection Package” bundling subsidy reform and cash transfers and SME credit and import facilitation for essentials—so costs and cushions arrive together. Evidence and regional experience suggest this bundling is crucial to sustain reforms. (World Bank)
Scenario table: What likely passes—and how fast
| Reform lever | Direction with current Congress | 0–6 months | 6–18 months | Main constraints |
|---|---|---|---|---|
| Fuel subsidy reform | Phased cuts + targeting | Start with diesel/gasoline bands; anti-smuggling; first cash transfers | Broader indexation rule; full targeting system | Transport strikes; El Alto unrest (lostiempos.com, Visión 360) |
| FX/monetary | BCB autonomy + FX normalization | Transparency law; temporary FX allocation | Regime adjustment (band/crawl) if inflation expectations cooperate | Inflation spike risk; credibility gap (IMF) |
| Hydrocarbons | Pro-investment tweaks | Fast-track seismic/permits; pilot contract terms | New upstream round; gas-to-power integration | Lead times; YPFB capacity (OilPrice.com) |
| Lithium | Governance + selective greenlighting | Contract audits; disclosure; pause/renegotiate | Approvals with stricter ESG & revenue split | Court challenges; community consent (MINING.COM, S&P Global) |
| Budget | Consolidation with cushions | Supplemental w/ subsidy savings; protect social spending | Public investment pivot; medium-term fiscal rule | Pro-cyclical drag; low admin capacity (IMF) |
How the runoff outcome will affect the path (holding Congress constant)
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If Rodrigo Paz (PDC) wins: The expectation is faster fiscal/anti-corruption moves, measured subsidy cuts, strong decentralization rhetoric but implemented in stages; guarded openness on lithium (state majority and transparency). However, the odds are lower for a formal IMF program; and higher odds of multilateral patchwork and domestic consolidation.
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If Jorge Quiroga (LIBRE) wins: Tilt toward deeper agricultural/biofuel deregulation, tougher labor/land reform pushes in the east, potentially faster FX normalization. The odds seem slightly higher for formal IMF engagement if inflation and reserves worsen, given alignment with market-friendly reforms.
Either way, with this Congress, the direction is stabilization and re-investment; the tempo and social cushions will be the big differences.
What to watch (early indicators)
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First 100-day budget addendum: size of subsidy cuts vs. transfer envelope. (lostiempos.com)
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BCB bill on autonomy/data transparency and any FX facility backstopped by multilaterals. (IMF)
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Lithium contract audits and a governance law (disclosure, royalties, water). (MINING.COM)
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Hydrocarbons licensing tweaks and whether a pilot upstream round is announced. (OilPrice.com)
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Social peace: transport/fares agreements and protest calendars (determine how quickly reforms can move).
Bottom line
A non-MAS Congress gives Bolivia its first real window in years to stabilize the macroeconomy, rationalize fuel subsidies, normalize the FX market, and reboot extractives with better governance. The governing coalition that emerges will decide how fast and how cushioned that adjustment is—but the direction of travel is set by arithmetic, not ideology. The sooner lawmakers bundle fiscal cuts with visible social protection and transparency, the better the odds that policy changes stick.
